Agriculture Committee on March 8th, 2023

[Jagmeet Singh, NDP, Burnaby South, BC]

How much profit is too much profit?

[Galen G. Weston]

A company needs some degree of profit—

[Jagmeet Singh, NDP, Burnaby South, BC]

Record profits, more than you've ever made, ever?

[The Chair, Liberal, Kody Blois]

Mr. Singh, I'm going to stop you there.

Of course, your time is your time, and I can appreciate that, but we've invited—in fact, we've summoned—these witnesses to come here.

You ask a question. Every member of this committee is expected to be able to hear the response. I need you to be more mindful of making sure that it is the case.

I know it's your turn, and I'll give you that discretion, but please don't cross lines here.

I'll go back to you.

[Jagmeet Singh, NDP, Burnaby South, BC]

How much profit is too much profit? You're making more money than you've ever made. How much profit is too much profit?

[Galen G. Weston]

We're a big company, and the numbers are very large, but it still translates right down to the bottom line at $1 per $25 of groceries. If you consider our growth, growth in profit in 2022 is 25 times lower than the unprecedented increases in costs that are being faced by the industry and by the world.

The fact that we have lower food price inflation in Canada than in so many other parts of the world is in part due to the high functioning of our food system here and in part to the meaningful effort that is being made by the grocery store industry to keep prices as low as possible.

[Jagmeet Singh, NDP, Burnaby South, BC]

With respect, Mr. Weston, you mention this $1 bit. We could put a factor in front of you. Your company is making one million dollars a day in excess profits. No one feels sorry for your profit margin when you're making a million dollars, not just in profit but in excess profit a day at the same time as Canadians are experiencing the most unprecedented inflation in their lives. How can you look a family in the eyes and tell them that that's okay, that what you're doing is okay?

[Galen G. Weston]

I had a conversation with a customer in a store just the other day. She came to me and she said something similar. She asked how we can have such exorbitant profits. We chatted for about 15 minutes, and I explained what I'm explaining here to the committee. She understood, and she said that she hadn't realized that. She said that that's not the way it was being characterized when she read The Globe and Mail or Toronto Star.

I said that all I could tell her was that this was the truth. This is what was going on and, if we didn't raise retail prices as costs went up, the companies that we operate would disappear almost instantly.

That's why this point about low profit margins is so important. One hundred per cent of the total profit of the industry could go into lower food prices, and the price of a grocery basket for that customer who I spoke to would still be $24—

[Jagmeet Singh, NDP, Burnaby South, BC]

How do you square that?

[Galen G. Weston]

—and that's not to say it's not important, but our ability to effect this change is limited. That's why we all need to work together.

[Jagmeet Singh, NDP, Burnaby South, BC]

How do you square that? How do you square what you're saying with the fact that you're experiencing unprecedented profits while people are struggling? How do you square that with the record bonuses that you and your colleagues are receiving? How do you square that with the excess profits that you're making per day? How do you square that with the record profits you're making year over year? How do you square that? It doesn't add up.

Mr. Weston, I have more than 2,000 people who submitted questions saying that they are struggling while you're making these record profits. That explanation does not give any solace to the people who I've heard from at all.

[Galen G. Weston]

I understand how difficult it is for so many Canadians. That's why we're taking decisive action within the constraints of what we're actually able to influence.

We stopped $500 million of unjustified cost increases in our organization. We offer the lowest prices in the market in our discount stores like No Frills and Maxi. No Frills is recognized as having the most trusted prices in the country. We ad match in our large store formats on every single ad that is available in the market so that the customers don't have to shop around from one store to another to make sure they get the best value.

[Jagmeet Singh, NDP, Burnaby South, BC]

Mr. Weston, that doesn't fix the problem.

[Galen G. Weston]

We are actively losing money on core commodities—milk, vegetable oil, butter, certain cheeses, and all kinds of items—every day of the week.

We are working hard on behalf of Canadians.

[Jagmeet Singh, NDP, Burnaby South, BC]

You still have not been able to answer this basic question.

When a family that's struggling right now looks at your profit.... How much profit is too much profit? How much is enough? You're making more than you've ever made, ever. You've not contradicted that point because we know it's true. How much profit is too much profit at a time like this, when Canadians are literally saying that they are struggling? How much is too much then? For you, is there no limit to how much profit you can make—

[Galen G. Weston]

A successful—

[Jagmeet Singh, NDP, Burnaby South, BC]

—on the backs of Canadians who are struggling because they can't afford their groceries? Is there no limit?

[Galen G. Weston]

Reasonable profitability is an important part of operating a successful business. I think that $1 out of $25 of sales is reasonable profitability.

It's worth mentioning that big numbers in large enterprises like ours.... Let's say our profit was in and around $1.9 billion last year, a very big number. Over $2 billion is going to be reinvested back into this country—

[Jagmeet Singh, NDP, Burnaby South, BC]

The last question for me, then—

[Galen G. Weston]

—back into new stores, into new infrastructure, into creating jobs.

It's not just about profit. It doesn't go to me. It goes back into this country.

[Jagmeet Singh, NDP, Burnaby South, BC]

My last question, then—

[Galen G. Weston]

If you have reasonable profit levels and you have—

[The Chair, Liberal, Kody Blois]

Actually, gentlemen—sorry—we're going to have to leave it there.

I'll let you finish your thought, Mr. Weston.

Unfortunately, we're at time, Mr. Singh. I even gave you a few extra seconds to try to make sure that was finished.

Mr. Weston, if you'd like to finish out that thought, then we are going to move on to the next round.

[Galen G. Weston]

I would simply say that our profit levels are reasonable. We are working hard to lower prices for Canadians in every way that we can. The profit that we do generate we reinvest back into this country to create more stores, more services and more jobs.

Thank you.

[The Chair, Liberal, Kody Blois]

We're now going to turn to our second round.

I have Mr. Barlow for up to five minutes, please.